2017 and 2018: recap and outlook

The U.S inaugurated a new President, North Korea flexed its nuclear capabilities, hurricanes tore through the Caribbean, Brexit tensions soared and, after nine years of National, New Zealand changed its government.

Markets generally shrugged off all the world threw at them, performing well across the board. The only standout decline was the Kiwi dollar, following the announcement that NZ First would put Labour and the Greens into power. The NZD traded at 73.3 cents to the US$ on the Friday before the election, and in the week following Winston Peters’ announcement, the dollar was trading below 68.5 cents. 

A quick look at global markets for the year to 14 December shows handsome returns in NZD terms:

• MSCI World Index up 18.2%
• S&P 500 up 18.0%
• STOXX 600 European Index up 19.3%
• MSCI ESG Leaders up 20.2%
• NZX50 (gross) up 21.0%

A healthy year for developed markets equities. The S&P 500 is heading for its ninth straight year of gains. In fact, the S&P 500 has risen in 14 of the last 15 years! Incredible.